Serbia produces almost 3/4 of its power in coal-fired plants and almost 1/4 from hydro power.[1] Energy consumption is expected to exceed energy production by 2012 and Elektroprivreda Srbije (EPS), Serbia's largest energy producer, is looking to add 1400 MW of coal-fired power, as well as develop Đerdap III, a hydroelectric dam with approximately 2.4 gigawatts of power.[2]

According to its website EPS owns and operates power stations with a total installed capacity of of 8,359 megawatts (MW). Of this, 5,171 MW is from lignite-fired thermal power plants, 353 from gas and liquid fuel-fired combined heat and power plants and 2,835 from hydro power plants. EPS also operates three power plants with a total capacity 461 MW which it does not own.[3]

Existing coal-fired power stations

EPS owns and operates three coal-fired power stations. These are the:[4]

TPP Nikola Tesla Power Plant with an existing capacity of 2,662 MW.[5] The plant is the largest coal plant in Serbia, providing 47 percent of the total capacity of the country's electric power system.[6]

TPP Morava Power Plant, a 108 megawatt lignite fired power station which is located on the right bank of the river Velika Morava near the town of Svilajnac.[8]

the TPP Kostolac Power Plant, which comprises the 640 megawatt TPP Kostolac A plant and the 281 megawatt TPP Kostolac B. The TPP Kostolac A plant also produces heating energy for heating the cities of Kostolac and Pozarevac.[9]

Proposed coal-fired power stations

On June 30, 2011, EPS and Italy's Edison signed a preliminary deal to jointly develop the two coal-fired units. A feasibility study is expected to be completed in the first quarter of 2012. After that the two utilities will set up a joint venture. They gave no estimation of the cost.[11][12]

Under the proposal, Edison offered EPS a 36.4 percent stake in the new company, in which EPS had already invested 300 million euros ($424.8 million) back in 1988 until putting the construction on hold due to lack of funds. EPS had earlier put the construction cost of the plant at around 1.6 billion euros ($2.3 billion). No bidder has expressed interest in building the plant.[11]

In 2009, China president Hu Jintao and Serbia president Boris Tadic signed a 15-year agreement for China to invest $1.25 billion in Serbia’s infrastructure and energy through OPM Kostolac. The deal is the latest in a series of energy projects agreed over the past two years with China, along with Russia, when Serbia faced international isolation in the 1990s.

The initial plan was for a new power bloc to replace the two existing plants at the TPP Kostolac Power Plant, with respective installed capacity of 100 megawatts and 200 megawatts. The plants were to be decommissioned in 2017 and 2024 and replaced with the new one, fueled by the Drmno mine, which has around 350 million tons of remaining coal reserves, and the planned acquisition of the nearby Dubravica field, which contains around 400 million tons of recoverable coal reserves. The $700 million new power bloc was expected to produce 2.5 billion kilowatt-hours of electricity a year based on 7,000 operating hours, and would start generating power between 2014 and 2020.[13]

In October 2012 it was reported that Serbia plans to apply to a $10 billion fund that China earmarked for investments in 16 countries of central and eastern Europe. The loan would be for the $700 million project to add a new 350-megawatt plant in the Kostolac power generation complex and increase coal output at the Drmno mine from 9 to to 12 million tons a year. China Machinery Engineering is already involved in an upgrade of two plants at Kostolac B, supported by a $344 million 20-year loan from the Export-Import Bank of China, or Exim Bank.[14]

On October 20, 2011, Serbia's power utility Elektroprivreda Srbije (EPS) said it had signed a preliminary deal with a Chinese consortium to jointly build a 744 megawatt coal-fired unit at an estimated cost of more than 2 billion euros ($2.7 billion). Under the deal, a consortium that includes China Environmental Energy Holdings and Shenzhen Energy, and EPS, will form a joint venture for the future project in the southwestern town of Obrenovac, part of its Nikola Tesla power complex. An upgrade of the Radeljevo coal mine will feed the plant. The deal is the latest in a series of energy projects agreed over the past two years with China, along with Russia, when Serbia faced international isolation in the 1990s.[15]

The Stavalj Power Station is a proposed 350MW coal-fired power station in Stavalj, Serbia, 250 kilometers (155 miles) south of Belgrade. The station would be fueled by the Štavalj lignite coal deposit, estimated by the Serbia Ministry of Mining and Energy to have 70 million tonnes of coal reserves, sufficient to fuel the plant for 40 years. A pre-feasibility study has been developed for evaluating a new underground coal mine and thermal power plant complex, with the mine having a planned mining rate of 2.3 million tonnes per year of coal.[16]

On May 9, 2012, Serbia and Alta AS, a Czech engineering and energy company, signed a letter of intent to develop the plant and mine. The 500 million euro ($650 million) plant will take three to five years to complete, and will start after technical and financial details are agreed on. Financing will come from a “consortium of banks,” according to Alta. Serbia plans to become a net exporter of electricity by 2015.[17]

Proposed coal mine expansion

The European Bank for Development and Reconstruction (EBRD) will decide by July 26, 2011, whether to pay €80 million for the Serbian state-owned energy company EPS to purchase new extraction equipment for its expanding coal mine in the Kolubara basin, some 70 km south of Belgrade. The Kolubara river runs through the region where the coal mine is.[23]

Various civil groups oppose the loan, citing corruption. Piotr Trzaskowski from the central and eastern European Bankwatch Network - an NGO monitoring how public funding is being used in the energy sector - said EPS is very close to the government, so the interests of the coal industry are represented in Belgrade's policy-making apparatus over cleaner energy alternatives. State prosecutors also launched an investigation in early 2011 into EPS's mine managers at Kolubara. They were suspected of leasing equipment at inflated prices and selling coal cheaply to intermediaries, who then made significant profits selling it on to power stations. An audit at EPS also revealed unjustified increases in expenditures to the benefit of private companies, according to a letter CEE Bankwatch wrote to the EBRD urging it to postpone its investment decision.

A local community from Vreoci, a village set to be relocated in order for the mine to be expanded, also opposed expansion. In a letter sent to the EBRD, the Vreoci villagers point to "corruption and misuse of funds aimed for relocation of the people in Vreoci, violation of the laws and the Serbian Constitution and delays in the implementation" of the relocation plan. The villagers are particularly upset that the local cemetery is already being levelled down and exhumations are being carried out without the consent of the families. Heavy police presence has blocked access to the cemetery and church.[24]

Climate commitments

In June 2015 the Serbian government announced a CO2 emissions target that official figures showed would be a 15% increase in the country’s emissions by 2030. Serbia is dependent on coal for around 70% of its energy.[25]